European Institute

The European Central Bank finally launched (January 22) an unprecedented government-bond buying program – headlined as “quantitative easing” – to pull the European Union back from the precipice of deflation and stimulate economic growth.

The widely expected package calls for national central banks to buy their own country’s government bonds and thereby protect all Europeans from having to cover the loan defaults of profligate member-countries. ECB would, in turn, buy €60 billion ($69 billion) monthly in government bonds from the central banks starting in March. These purchases would continue until at least September 2016, or “until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2 percent,” ECB President Mario Draghi said. ECB sovereign debt purchases would never exceed more than one-third of a country’s total debt issuance (the ECB holding of each type of bond would be capped at 25 percent). No corporate bonds would be included. Also, interest rates for four-year loans to banks were lowered by 0.10 percentage point, but other ECB borrowing rates were remained the same.

Turkey’s autocratic president Recep Tayyip Erdogan added another critical, albeit controversial electoral win to his column last Sunday. A referendum officially changing the regime from a parliamentary democracy to a presidential system with little or no checks and balances passed with a narrow margin (51-49 percent).

By James D. Spellman, Strategic Communications LLC

In another move to break down barriers to a single digital market, the European Union’s anti-trust crusader accused six of Hollywood’s largest movie studios and the British satellite broadcaster Sky of signing country-specific deals with pay-TV providers that obstruct competition to the disadvantage of consumers.

Rumored for months as the five-year antitrust investigation was finishing, the European Union has formally accused Google of skewing its search results to those companies participating in the search engine’s shopping services. Brussels is also continuing its pursuit of other anti-competitive charges against Google businesses, including the mobile operating system Android, which U.S. rivals have been pressing Washington to launch antitrust litigation against.

“I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules," said EU Competition Commissioner Margrethe Vestager. “The result [is] that consumers do not see what’s relevant for them,” she added, stressing the commission’s concern for maximizing “consumer choice and innovation” on the Internet. “We are not here to take the side of rivals — we are here to take the side of competition.”^[1]

To replace outmoded and varying national data protection rules that undermine the creation of a European digital single market, negotiators from the Commission, Council and Parliament unveiled a far-ranging policy to strengthen privacy safeguards that would give 500-million Europeans more control over their personal data while imposing tougher restrictions on law enforcement’s use of private data.

Who bails out failed banks this time? With what means – public and/or private? And, to what extent to ensure safety, soundness in financial markets?

With numerous banks throughout Europe showing troubling balance sheets – the bad debts and non-core assets increasingly undermining financial institutions’ profitability in a sluggish global economy – Europe’s leaders, central banks, and investors are debating what should be done quickly to prevent bank failures, bolster investor confidence, and ensure that another global financial crisis does not flare up. On the sidelines of this week’s World Bank-IMF meetings, the issues are high among bankers’ concerns.

Domestic shale gas was supposed to be a game changer for many Central and Eastern European countries. It presented a potential solution to the region’s two most salient energy problems: import dependency on Russian natural gas and reliance on coal, one of the dirtiest of fossil fuels.

On November 13, the Republic of Moldova, a member of the EaP (EU’s Eastern Partnership), and EU member state Bulgaria held final second round presidential elections, with Russia-friendly candidates emerging victorious in both instances. 

Two years up and running, the European Parliament Research Service (EPRS) continues to expand as MEPs enhance their capacity to do policy analysis independently of the EU Commission. A new report, to be published soon, from EPRS examining how government oversight is carried out in the United States is an indicator of how much Parliament is looking across the pond for guidance with this initiative.